MONROE, Mich. (AP) -- Furniture maker La-Z-Boy Inc. said Thursday it will cut jobs and close stores as orders plunge in response to the economic turmoil.
La-Z-Boy said it will reduce its work force by 10 percent, or about 850 people, across all levels of the company. Severance and other benefit costs will result in a charge of $1.5 million to $2.5 million, most of which will be booked in the current quarter.
It will also close between 15 and 20 stores, mostly dealer-owned, in the next 90 to 120 days.
The company plans to slash its planned capital spending for fiscal 2009 to between $18 million and $20 million, from $27 million, and "aggressively reduce its overall operating expenses and inventories to be in alignment with today's volumes."
"Given the turmoil in the global financial markets coupled with declining consumer confidence and tightening credit, the furniture industry is in the midst of an unprecedented downward spiral as the consumer reacts to these events by postponing home furnishings and other discretionary purchases," said Kurt Darrow, president and chief executive, in a statement. The actions reflect a climate which has "rapidly turned in recent weeks into a much weaker demand environment."
The company will continue with plans to open a new facility in Mexico in January and will continue to consolidate its warehouses.
La-Z-Boy plans to report fiscal second-quarter results on Nov. 18.
Shares closed down 15 cents, or 2.9 percent, at $5.03 before the announcement.